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DUBLIN, Calif., Aug. 04, 2017 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated (Nasdaq:GIGA) (the “Company”) reported today net sales for the first fiscal quarter ended June 24, 2017 of $2.0 million, a 41% decrease as compared to $3.4 million for the first quarter of fiscal 2017. The decrease in first quarter fiscal 2018 sales was primarily attributable to a $1.8 million decrease from the Company’s Giga-tronics division, from $2.1 million in fiscal 2017 to $297,000 in fiscal 2018, due to recent legacy product line divestitures as well as a decrease in ASG product shipments. In the first quarter of fiscal 2018, the Company recorded $200,000 of sales associated with the ASG product compared to $674,000 recorded in the first quarter of fiscal 2017. These decreases were partially offset by a $377,000 increase in net sales from the Company's Microsource business unit (Microsource) from $1.3 million in fiscal 2017 to $1.7 million in fiscal 2018, which was primarily due to an increase in YIG RADAR filter shipments and completion of certain related nonrecurring engineering (NRE) services.

Net loss for the first quarter of fiscal 2018 was $1.3 million, or $0.13 per fully diluted common share, compared to $102,000, or $0.01 for the first quarter of fiscal 2017. The increase in net loss is primarily due to the lower net sales described above. The net loss recorded in the first quarter of fiscal 2017 included a gain of $802,000 associated with the Company’s sale of the Switch product line.

Due to variability in the quarter-to-quarter bookings for the ASG product along with timing of expected large YIG filter contracts, the Company entered into a new $1.5 million term loan agreement with Partners for Growth LLP (PFG) which was entirely funded during April 2017. The loan has a two-year term, with interest only payments for the term of the loan. However, as of the end of the first quarter of fiscal 2018, the Company was not in compliance with certain financial covenants on the loan. On August 2, 2017, the Company and PFG entered into a short-term forbearance arrangement (through the end of August) with respect to such noncompliance. No assurance can be given that the Company will be able to comply with the terms of the forbearance agreement, or that PFG will agree to a further extension of forbearance at the end of the initial forbearance period. The Company will most likely be required to raise additional capital to rectify the noncompliance. No assurance can be given that the Company will be able to raise sufficient capital on a timely basis.

The Company experienced delays with ASG orders in the first quarter ended June 24, 2017, however, the Company announced today that it had received one of its expected follow on orders from the United States Navy for its Real-Time Threat Emulation System (Real-Time TEmS). The current order, worth $1.7 million, is a combination of its new Advanced Signal Generator Hardware Platform, along with software developed and licensed to the Company from a major aerospace and Defense Company. The order also includes integrating the Real-Time TEmS product with additional third party hardware and software for the customer, along with an upgrade to a unit which was shipped in the fourth quarter of fiscal 2017. The Company also announced today that it has received an additional $471,000 order extending ongoing production of its high performance YIG filters for a major aerospace company. The Company expects to fulfill the combined orders, worth approximately $2.2 million in the current fiscal year.

Suresh Nair, the Company’s Co-CEO stated, “As announced previously, we expected revenue for the quarter to be significantly below normal levels. While the Company successfully increased shipments of RADAR filters, it was not able to completely offset the shortfall from the lack of backlog for our Advanced Signal Generators.”

John Regazzi, Co-CEO of Giga-tronics, said “This repeat order for our Real-Time Threat Emulation System confirms its importance to the US Navy for their current and future EW programs. We are committed to supporting the U.S. Navy as they further deploy our solution for testing EW systems and we are pleased to be selected as a supplier of advanced emulation equipment for their verification labs.”

Giga-tronics will host a conference call today at 4:30 p.m. ET to discuss the first quarter results. To participate in the call, dial (888) 517-2513 or (847) 619-6533, and enter PIN Code 7310299#. The call will also be broadcast over the internet at www.gigatronics.com under "Investor Relations." The conference call discussion reflects management's views as of August 4, 2017.

This press release contains forward-looking statements concerning operating results, future orders, and sales of new products, shippable backlog within a year, long term growth and margin, expected shipments, product line sales, and customer acceptance of new products. Actual results may differ significantly due to risks and uncertainties, such as: uncertainty as to the company’s ability to continue as a going concern; delays in customer orders for the new ASG and our ability to manufacture it; receipt or timing of future orders, cancellations or deferrals of existing or future orders; our need for additional financing; results of pending or threatened litigation; the volatility in the market price of our common stock; and general market conditions. For further discussion, see Giga-tronics' most recent annual report on Form 10-K for the fiscal year ended March 25, 2017 Part I, under the heading "Risk Factors" and Part II, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations."